In the case of Chawla v Hewlett Packard Ltd, the EAT was asked to apply a 10% uplift to an award for injury to feelings compensation, following the Court of Appeal case of Simmons v Castle. It declined to do so, holding that the requirement to uplift compensation does not apply to ET litigation as a whole.
The Simmons case implemented the 10% increase in general damages that had featured strongly in the Jackson Reforms but was omitted from the associated legislation that made significant changes to the costs regime in the civil courts.
As such, from 1 April 2013, success fees and after the event (ATE) insurance premia were no longer recoverable, leaving Claimants exposed to higher risk, and lower recovery of costs. Accordingly, the 10% increase needed to be introduced to recompense Claimants for this potentially significant change.
As Claimants in the Employment Tribunal system do not face the same risks in terms of costs, the EAT held that Simmons could not be said to apply.
The purpose behind the uprating was different to that introduced and clarified by the cases of Da’Bell v National Society for Prevention of Cruelty to Children and Bullimore v Pothecary Witham Weld (No. 2), as this uprating was a necessary one to reflect the current value of money.
The judgment in Chawla agrees with the approach taken by HHJ Serota QC in Pereira de Souza v Vinci Construction UK Ltd, also in the EAT. However, it is at odds with two other cases decided by different divisions of the EAT which held that the increase did apply (The Cadogan Hotel Partners Ltd v Mr Ozog and The Sash Window Workshop Ltd. v King), and the Presidential Guidance issued on 13 March 2014, which specifically references it.
The future is therefore far from settled and an appellate decision by the Court of Appeal is needed to clarify the approach to be taken.
However, our view is that this judgment appears to be right, else Claimants in the Tribunal system would be recovering more compensation than those in the civil courts but without the underlying risk that the increase was introduced to rectify. This would not be a particularly just outcome.